According to a new news published by Bloomberg, Bitcoin miners may face a loss of $ 10 billion due to the halving, which is expected to occur within five days.
As Koinfinans.com reported, the instant reward for mining new blocks will be reduced from 6.25 BTC per block to only 3,125 BTC. The halving is expected to deal a particularly strong blow to mining companies with above-average operating costs.
In recent periods, miners have managed to avoid these losses with the effect of the bull market that occurs after each halving. Miners attempted to build cash liquidity on the verge of the first two halvings in 2012 and 2016, but this was not the case ahead of the third halving in 2020, according to Chainalysis. Based on Bitcoin’s performance after the previous two mining cycles, miners had to wait longer to cash out their reserves as they expected higher prices.
This time, the total balance of mining pools also decreased by more than 20%, but the decrease is much smaller compared to the first two halvings. Bitcoin priceThe fact that Bitcoin managed to reach an all-time high on the eve of the halving made miners feel more comfortable liquidating some of their assets to prepare for the serious impact of the halving.
Bitcoin halvingIn addition to mining, miners are also struggling with increasing competition from artificial intelligence (AI) companies.
Core Scientific CEO Adam Sullivan stated that power in the United States has become “extraordinarily limited.” Tech giants like Amazon want to spend huge amounts of money on data centers. This is another important detail that will make it difficult for miners to enter into new low-cost energy contracts.
